EXHIBIT 10.51
SILICON VALLEY BANK
AMENDMENT TO LOAN DOCUMENTS
BORROWER: PIVOTAL CORPORATION, A BRITISH COLUMBIA CORPORATION ("PARENT");
AND PIVOTAL CORPORATION, A WASHINGTON CORPORATION ("PIVOTAL US")
ADDRESS: 000 XXXXXX XXXXXX, XXXXX 000
XXXXXXXXX, XXXXXXX XXXXXXXX, XXXXXX X0X 0X0
DATE: OCTOBER 29, 2003
THIS AMENDMENT TO LOAN DOCUMENTS (THIS "AMENDMENT") is entered into
between SILICON VALLEY BANK ("Silicon"), whose main address is 0000 Xxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 (and with an office at 0000 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx 00000), and the borrower(s) named above (individually and
collectively, and jointly and severally, the "Borrower"), whose chief executive
office is located at the above address ("Borrower's Address").
Silicon and Borrower agree to amend the Loan and Security Agreement
between them, dated as of December 30, 2002 (as amended, restated, supplemented,
or otherwise modified from time to time, the "Loan Agreement") and any and all
documents, instruments and agreements relating thereto (collectively, the "Loan
Documents"), all as set forth herein. (Capitalized terms used but not defined in
this Amendment, shall have the meanings set forth in the Loan Agreement.)
1. VIOLATION OF MAXIMUM QUARTERLY NET LOSS FINANCIAL COVENANT; CSL PROVISIONS IN
EFFECT. Silicon and Borrower agree that the Event of Default arising solely from
Borrower's failure to comply with the Maximum Quarterly Net Loss financial
covenant set forth in Section 5 of the Schedule to the Loan Agreement for the
measurement period ended September 30, 2003 (the "Designated Default") hereby is
waived; provided, however, that the CSL Provisions have been (at all times since
the occurrence of the Designated Default), are, and, notwithstanding such
waiver, shall continue to remain, in effect. It is understood by the parties
hereto, however, that the foregoing waiver of the Designated Default does not
constitute a waiver of the aforementioned covenant with respect to any other
date or time period, or of any other provision or term of the Loan Agreement or
any related document, nor an agreement to waive in the future such covenant with
respect to any other date or time period or any other provision or term of the
Loan Agreement or any related document.
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
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2. AMENDMENTS TO LOAN AGREEMENT.
(a) The portion of Section 1 of the Schedule to Loan Agreement that
currently reads:
1. CREDIT LIMIT
(Section 1.1): The Credit Limit equals: (a) so long as the
ABL Provisions are not in effect, an amount
not to exceed at any one time outstanding
the result of (i) the Maximum Credit Limit
(as defined below), minus (ii) the sum of
(y) the amount of all outstanding Letters of
Credit (including drawn but unreimbursed
Letters of Credit) and (z) the FX Reserve;
and (b) upon the occurrence of the ABL
Provisions Trigger and so long as the ABL
Provisions are in effect, an amount not to
exceed the result of (i) the lesser of (y)
the Maximum Credit Limit and (z) the sum of
(1) 80% (the "Advance Rate") of the amount
of Borrower's Eligible Accounts (as defined
in Section 8 above) and (2) the amount of
Restricted Pledged Cash (if any) of
Borrower, minus (ii) the sum of (y) the
amount of all outstanding Letters of Credit
(including drawn but unreimbursed Letters of
Credit) and (z) the FX Reserve. The
foregoing clause (b) is an ABL Provision. As
used herein, the term "Maximum Credit Limit"
means, as of any date of determination: (a)
$7,000,000, with respect to any date of
determination before September 30, 2003; and
(b) $6,000,000, with respect to any date of
determination on or after September 30,
2003.
Anything herein to the contrary
notwithstanding, all outstanding Loans shall
be immediately repaid upon the occurrence of
the CSL Provisions Trigger and no further
Loans shall be made so long as the CSL
Provisions are in effect. This paragraph is
a CSL Provision.
, hereby is amended and restated in its entirety to read as follows:
1. CREDIT LIMIT
(Section 1.1): The Credit Limit is an amount not to exceed,
at any one time outstanding, the lesser of:
(a) the sum of the below-defined Maximum
Credit Limit plus the below-defined Guidance
Line
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Limit (the "Overall Credit Limit"); or (b)
the sum of (I) and (II) below:
I. Revolving Line of Credit.
Revolving Loans: Subject to the terms and conditions of this
Agreement, and during the period commencing
on the date of this Agreement and ending on
the Business Day immediately preceding the
Maturity Date, Silicon will make revolving
advances ("Loans") in an aggregate amount at
any one time outstanding not to exceed: (a)
so long as the ABL Provisions are not in
effect, an amount not to exceed at any one
time outstanding the result of (i) the
Maximum Credit Limit (as defined below),
minus (ii) the sum of (y) the amount of all
outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit)
and (z) the FX Reserve; and (b) upon the
occurrence of the ABL Provisions Trigger and
so long as the ABL Provisions are in effect,
an amount not to exceed the result of (i)
the lesser of (y) the Maximum Credit Limit
and (z) the sum of (1) 80% (the "Advance
Rate") of the amount of Borrower's Eligible
Accounts (as defined in Section 8 above) and
(2) the amount of Restricted Pledged Cash
(if any) of Borrower, minus (ii) the sum of
(y) the amount of all outstanding Letters of
Credit (including drawn but unreimbursed
Letters of Credit) and (z) the FX Reserve.
The foregoing clause (b) is an ABL
Provision. As used herein, the term "Maximum
Credit Limit" means, as of any date of
determination: (a) $7,000,000, with respect
to any date of determination before
September 30, 2003; and (b) $6,000,000, with
respect to any date of determination on or
after September 30, 2003.
Anything herein to the contrary
notwithstanding, all outstanding Loans shall
be immediately repaid upon the occurrence of
the CSL Provisions Trigger and no further
Loans shall be made so long as the CSL
Provisions are in effect. This paragraph is
a CSL Provision.
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(b) The following hereby is added at and to the end of Section 1 of the
Schedule to Loan Agreement:
PLUS
II. Guidance Line (FX and Cash Management Services).
Guidance Line Limit: $100,000.
(a) Guidance Line Foreign Exchange Contracts.
In addition to the FX Forward Contracts that
Borrower may enter into pursuant to the
above Part I of this Section 1 of the
Schedule, Borrower may, under this Part
II(a) of this Section 1 of the Schedule,
enter into other foreign exchange forward
contracts with Silicon, on its standard
forms, under which Borrower commits to
purchase from or sell to Silicon a set
amount of foreign currency more than one
Business Day after the contract date (the
"Guidance FX Forward Contracts"); provided
that the total Guidance FX Forward Contracts
at any one time outstanding may not exceed
10 times the result of (1) the amount of the
result of the Guidance Line Limit set forth
above, minus (2) the aggregate amount of
outstanding Obligations in respect of Cash
Management Services set forth in Part II(b)
below. Silicon may, in its discretion,
terminate the Guidance FX Forward Contracts
at any time that an Event of Default occurs
and is continuing. The Guidance FX Forward
Contracts shall terminate upon the earlier
of (a) the Maturity Date, or (b) any earlier
effective date of termination of this
Agreement (or such later date requested by
Borrower as Silicon may agree in writing in
its sole discretion if and to the extent
Borrower's Obligations in respect of the
Guidance FX Forward Contracts are secured by
cash in amounts and on terms and conditions
acceptable to Silicon in its sole
discretion). Borrower shall execute all
standard form applications and agreements of
Silicon in connection with the Guidance FX
Forward Contracts, and without limiting any
of the terms of such applications and
agreements, Borrower shall pay all standard
fees and charges of Silicon in connection
with
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the Guidance FX Forward Contracts. All
amounts that Silicon pays or expends in
respect of any Guidance FX Forward Contracts
shall constitute Obligations hereunder.
(b) Guidance Line Cash Management Services.
Subject to the terms and conditions of this
Agreement, and during the period commencing
on the date of this Agreement and ending on
the Business Day immediately preceding the
Maturity Date, Silicon agrees to provide to
Borrower, in an aggregate amount up to the
Cash Management Services Sublimit (as
defined below), one or more cash management
services of Silicon, including merchant
services, business credit card, ACH, and
other services as further identified in one
or more cash management services agreements
and similar agreements entered into between
the parties (collectively all of such
services are referred to herein as the "Cash
Management Services"). Silicon may charge to
Borrower's Loan account, or debit any
deposit account of Borrower maintained with
Silicon for (which debit shall not
constitute a set-off), any amounts that may
become due or owing to Silicon in connection
with the Cash Management Services. Borrower
agrees to execute and deliver to Silicon all
standard form applications and agreements of
Silicon in connection with the Cash
Management Services, and, without limiting
any of the terms of such applications and
agreements, Borrower will pay all standard
fees and charges of Silicon in connection
with the Cash Management Services. The Cash
Management Services shall terminate on the
Maturity Date. From and after the Maturity
Date (or, at Bank's election, from and after
any earlier date of occurrence of an Event
of Default), Borrower's Obligations in
respect of Cash Management Services shall be
secured by cash on terms and conditions
acceptable to Bank. As used herein, the term
"Cash Management Services Sublimit" means an
amount equal to the result of $100,000 minus
one-tenth (1/10th) of the total Guidance FX
Forward Contracts then outstanding.
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(c) Section 4 of the Schedule to Loan Agreement, which
currently reads:
4. MATURITY DATE
(SECTION 6.1): NOVEMBER 15, 2003.
, hereby is amended and restated in its entirety to read as follows:
4. MATURITY DATE
(SECTION 6.1): DECEMBER 15, 2003.
(d) The portion of Section 5 of the Schedule to Loan
Agreement that currently reads:
MINIMUM QUALIFYING
CASH: Without limiting the generality of the first
sentence of Section 8(1) of this Schedule,
Pivotal US shall, at all times, maintain
Qualifying Cash on deposit in Deposit
Accounts of Pivotal US maintained with
Silicon in an amount not less than the
Required Deposit Amount plus the
Supplemental Required Deposit Amount As used
herein, the term "Required Deposit Amount"
means, as of any date of determination: (a)
$9,500,000, with respect to any date of
determination on or before August 15, 2003;
(b) $-0-, with respect to any date of
determination during the period commencing
August 16, 2003 and ending September 29,
2003; and (c) $7,000,000, with respect to
any date of determination from and after
September 30, 2003. As used herein, the term
"Qualifying Cash" means Restricted Pledged
Cash of Pivotal US or unrestricted cash of
Pivotal US, in each case, which shall not
directly or indirectly be funded from Loans
or other extensions of credit by Silicon,
and which at all times shall be subject to
Silicon's first-priority perfected security
interest but not encumbered by any other
lien. As used herein, the term "Supplemental
Required Deposit Amount" means, as of any
date of determination, an amount equal to:
(i) until such time (if ever) that Silicon
receives all items required under clauses
(a) and (c) of Section 8(7) of this
Schedule, $550,000; and (b) thereafter,
$-0-.
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, hereby is amended and restated in its entirety to read as follows:
MINIMUM QUALIFYING
CASH: [Intentionally Omitted]
3. LIMITED CONSENT TO TALISMA TRANSACTION.
(a) Borrower has advised Silicon that Parent intends to enter into a
transaction or a substantially contemporaneous series of related transactions,
substantially in accordance with the terms and conditions of that certain
Arrangement Agreement, dated October 7, 2003, among Parent, Talisma Corp.
("Talisma"), 675786 B.C. LTD., a corporation incorporated under the laws of
British Columbia and wholly-owned subsidiary of Talisma ("Acquisitionco"), and
the affiliates of Talisma identified therein as the "Oak Entities" (the
"Arrangement Agreement"; Borrower hereby represents and warrants that attached
hereto as Exhibit A is a true, correct, and complete copy of the Arrangement
Agreement, including all schedules, exhibits, annexes, and appendices thereto),
pursuant to which (i) Acquisitionco shall acquire all of the outstanding shares
of capital stock of Parent, (ii) Acquisitionco and Parent shall amalgamate under
the laws of British Columbia to form the amalgamated entity referred to in the
Arrangement Agreement as "Amalco", so that Amalco shall be a wholly-owned
subsidiary of Talisma and the successor-by-operation-of-law to Parent (such
transaction(s), collectively, the "Talisma Transaction"). Talisma currently is
party to that certain other Loan and Security Agreement, dated as of May 15,
2002 (as amended, restated, supplemented, or otherwise modified from time to
time, the "Talisma Loan Agreement"), between Talisma and Silicon.
(b) Anything in Sections 3.1, 5.5(i), and 7.1(n) of the Loan Agreement
to the contrary notwithstanding, Silicon hereby consents solely to the Talisma
Transaction; provided, however, that:
(i) nothing herein shall constitute a waiver of Silicon's
right to require such modifications (as Silicon may require in its good
faith business judgment) of the Loan Agreement and/or or the Talisma
Loan Agreement based upon the consummation of the Talisma Transaction.
(ii) as conditions to the effectiveness of the foregoing
consent: (A) each of Talisma and Amalco shall certify in writing to
Silicon the true and correct legal name of Amalco; (B) Silicon shall
have received lien searches listing all effective PPSA Registrations
which name any of Acquisitionco or Amalco as debtor that are registered
in the applicable registration office, none of which shall cover any of
the assets of Acquisitionco or Amalco (except (i) Permitted Liens, or
(ii) as otherwise agreed in writing by Silicon); (C) Silicon shall have
received an Assumption Agreement, in form and substance satisfactory to
Silicon, duly executed by Amalco relative to the Obligations of Parent
and the Loan Documents to which Parent is a party or by which Parent's
assets are bound; and (D) Silicon shall have received a copy of the
Certificate of Amalgamation duly issued by the Registrar of Companies
of the Province of British Columbia with respect to the effectiveness
of the above-described amalgamation.
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(c) It is understood by Borrower and Silicon, however, that the
foregoing consent does not constitute a consent or waiver under the Loan
Agreement or the other Loan Documents in respect of any matter or set of
circumstances other than the Talisma Transaction, nor an agreement to provide
any consent or waiver in the future under the Loan Agreement or other Loan
Documents in respect of any matter or set of circumstances other than with
respect to the Talisma Transaction. It is also understood by Borrower and
Silicon that the foregoing consent does not constitute a consent or waiver under
the Talisma Loan Agreement in respect of any matter or set of circumstances
whatsoever.
4. FEES. In consideration for Bank entering into this Amendment, Borrower shall
pay Bank a fee of $2,500 concurrently with the execution and delivery of this
Amendment, which fee shall be non-refundable and in addition to all interest and
other fees payable to Bank under the Loan Documents. Bank is authorized to
charge said fees to Borrower's loan account.
5. REPRESENTATIONS TRUE. Borrower represents and warrants to Silicon that
all representations and warranties set forth in the Loan Agreement, as amended
hereby, are true and correct in all material respects (except to the extent such
representations may be affected by transactions permitted by the Loan Agreement,
as amended hereby).
6. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior written
amendments to the Loan Agreement signed by Silicon and Borrower, and the other
Loan Documents between Silicon and Borrower set forth in full all of the
representations and agreements of the parties with respect to the subject matter
hereof and supersede all prior discussions, representations, agreements and
understandings between the parties with respect to the subject hereof. Except as
herein expressly amended, all of the terms and provisions of the Loan Agreement,
and all other Loan Documents shall continue in full force and effect and the
same are hereby ratified and confirmed.
[remainder of page intentionally left blank; signature page follows]
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7. COUNTERPARTS. This Amendment may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same document. Delivery of an
executed counterpart of this Amendment by telefacsimile shall be equally as
effective as delivery of an original executed counterpart of this Amendment.
Borrower: Silicon:
PIVOTAL CORPORATION, SILICON VALLEY BANK
a British Columbia corporation
By_______________________________
By_________________________________
President or Vice President Title____________________________
By_________________________________
Secretary or Ass't Secretary
PIVOTAL CORPORATION,
a Washington corporation
By_________________________________
President or Vice President
By_________________________________
Secretary or Ass't Secretary
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